Motherson Wiring Q3 Review: Startup Costs Of Greenfield Plants Dent Profitability— Motilal Oswal Retains 'Buy'

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Motilal Oswal Report

Motherson Sumi Wiring India Ltd.’s Q3 FY25 profitability missed our estimate, as start-up costs of new plants affected Ebitda/PAT by Rs 400 million/Rs 320 million. Adjusted for these costs, Ebitda margin would have been 12.1% in 9M FY25.

To factor in start-up costs of greenfield facilities, we cut our FY25E/FY26E EPS by ~6% each. We believe Mother Sumi Wiring deserves rich valuations, given its strong competitive positioning, top-decile capital efficiency, and benefits of electric vehicles and other megatrends in autos. Reiterate Buy with a target price of Rs 65 (premised on ~35 times Dec-26E earnings per share).

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